15
ATLANTIC COAST AIRLINES HOLDINGS, INC.
1995 STOCK INCENTIVE PLAN
(as amended as of May 5, 1998, and adjusted to
reflect May 15, 1998 stock split)
SECTION 1. Purpose of the Plan. The purpose of this
1995 Stock Incentive Plan effective October 18, 1995 ("Plan")
is to encourage ownership of common stock, $.01 par value
("Common Stock"), of Atlantic Coast Airlines Holdings, Inc., a
Delaware corporation (the "Company"), by eligible key
employees and directors of the Company and its Affiliates (as
defined below) and to provide increased incentive for such
employees and directors to render services and to exert
maximum effort for the business success of the Company through
grants of options and other stock-based awards. In addition,
the Company expects that the Plan will further strengthen the
identification of employees and directors with the
stockholders. Options granted under this Plan may be intended
to qualify as Incentive Stock Options ("ISOs") pursuant to
Section 422 of the Internal Revenue Code of 1986, as amended
("Code"), or may be options which are not intended to qualify
as ISOs ("Nonqualified Options"), either or both as provided
in the agreements evidencing the options as provided in
Section 6 hereof. As used in this Plan, the term "Affiliates"
means any "parent corporation" of the Company and any
"subsidiary corporation" of the Company within the meaning of
Code Sections 424(e) and (f), respectively.
SECTION 2. Administration of the Plan.
(a) Composition of Committee. The Plan shall be
administered by one or more committees of the Board (any
such committee, the "Committee"). If no persons are
designated by the Board to serve on the Committee, the
Plan shall be administered by the Board and all
references herein to the Committee shall refer to the
Board. The Board shall have the discretion to appoint,
add, remove or replace members of the Committee, and
shall have the sole authority to fill vacancies on the
Committee. Unless otherwise provided by the Board:
(i) with respect to any Award (as defined in Section 7)
for which such is necessary and desired for such Award to
be exempted by Rule 16b-3 of the Exchange Act, the
Committee shall consist of two or more directors, each of
whom is a "disinterested person" (as such term is defined
in Rule 16b-3 promulgated under the Exchange Act, as such
Rule may be amended from time to time), (ii) with respect
to any Award that is intended to qualify as "performance
based compensation" under Section 162(m) of the Code, the
Committee shall consist of two or more directors, each of
whom is an "outside director" (as such term is defined
under Section 162(m) of the Code), and (iii) with respect
to any other Award, the Committee shall consist of one or
more directors (any of whom also may be a Participant (as
defined in Section 4) who has been granted or is eligible
to be granted Awards under the Plan).
(b) Committee Action. The Committee shall hold its
meetings at such times and places as it may determine. A
majority of its members shall constitute a quorum, and
all determinations of the Committee shall be made by not
less than a majority of its members. Any decision or
determination reduced to writing and signed by a majority
of the members shall be fully as effective as if it had
been made by a majority vote of its members at a meeting
duly called and held. The Committee may designate the
Secretary of the Company or other Company employees to
assist the Committee in the administration of the Plan,
and may grant authority to such persons to execute Award
agreements or other documents on behalf of the Committee
and the Company.
(c) Committee Expenses. All expenses and
liabilities incurred by the Committee in the
administration of the Plan shall be borne by the Company.
The Committee may employ attorneys, consultants,
accountants or other persons.
(d) Powers of the Committee. Subject to the
express provisions of this Plan, the Committee shall be
authorized and empowered to do all things necessary or
desirable in connection with the administration of this
Plan with respect to the Awards over which such Committee
has authority, including, without limitation, the
following:
(i) prescribe, amend and rescind rules and
regulations relating to this Plan;
(ii) determine which persons are
Participants and to which of such Participants,
if any, and when options and/or other Awards
shall be granted hereunder;
(iii) to prescribe and amend the terms of
the Award agreements (which need not be
identical);
(iv) to make all other determinations deemed
necessary or advisable for the administration of
the Plan;
(v) determine whether, and the extent to
which adjustments are required pursuant to
Section 7(e) hereof; and
(vi) interpret and construe this Plan, any
rules and regulations under the Plan and the
terms and conditions of any Award granted
hereunder.
SECTION 3. Stock Reserved for the Plan. Subject to
adjustment as provided in Section 7(e) hereof, the aggregate
number of shares of Common Stock that may be issued and
issuable pursuant to all Awards (including Incentive Stock
Options) granted under the Plan is 2,500,000 and such number
of shares shall be and is hereby reserved for sale for such
purpose. The aggregate number of Shares subject to Awards
granted during any calendar year to any one Participant
(including the number of shares involved in Awards having a
value derived from the value of Shares) shall not exceed
750,000. The shares subject to the Plan shall consist of
authorized but unissued shares of Common Stock or previously
issued and reacquired shares of Common Stock. Any of such
shares which may remain unsold and which are not subject to
outstanding options at the termination of the Plan shall cease
to be reserved for the purpose of the Plan, but until
termination of the Plan or the termination of the last of the
options granted under the Plan, whichever last occurs, the
Company shall at all times reserve a sufficient number of
shares to meet the requirements of the Plan. The aggregate
number of Shares issued under this Plan at any time shall
equal only the number of shares actually issued upon exercise
or settlement of an Award and not returned to the Company upon
forfeiture of an Award or in payment or satisfaction of the
purchase price, exercise price or tax withholding obligation
of an Award.
SECTION 4. Eligibility. The persons eligible to
participate in the Plan as a recipient of Awards
("Participant") shall include only key employees and directors
of the Company or its Affiliates at the time the Award is
granted; provided, however, the members of the Committee shall
not be eligible to be granted Awards if the Company is
governed by Rule 16b-3 as in effect on April 31, 1994. An
employee who has been granted an option hereunder may be
granted an additional option or options, if the Committee
shall so determine.
SECTION 5. Grant of Options.
(a) Committee Discretion. The Committee shall have
sole and absolute discretionary authority (i) to
determine, authorize, and designate those key employees
and directors of the Company or its Affiliates who are to
receive options under the Plan (each, an "Optionee"),
(ii) to determine the number of shares of Common Stock to
be covered by such options and the terms thereof, and
(iii) to determine the type of option granted: ISO,
Nonqualified Option or a combination of ISO and
Nonqualified Options; provided that a non-employee
director may not receive any ISOs. The Committee shall
thereupon grant options in accordance with such
determinations as evidenced by a written option
agreement.
(b) Limitation on Incentive Stock Options. Except
as described in Section 6(i), the aggregate fair market
value (determined in accordance with Section 6(b) of this
Plan at the time the option is granted) of the Common
Stock with respect to which options intended to qualify
as ISOs may be exercisable for the first time by any
Optionee during any calendar year under all such plans of
the Company and its Affiliates shall not exceed $100,000.
SECTION 6. Terms and Conditions. Each option granted
under the Plan shall be evidenced by an agreement, in a form
approved by the Committee, which shall be subject to the
following express terms and conditions and to such other terms
and conditions as the Committee may deem appropriate.
(a) Option Period. The Committee shall promptly
notify the Optionee of the option grant and a written
agreement shall promptly be executed and delivered by and
on behalf of the Company and the Optionee, provided that
the option grant shall expire if a written agreement is
not signed by said Optionee (or his agent or attorney)
and returned to the Company within 60 days from date of
receipt by the Optionee of such agreement. Each option
agreement shall specify the period for which the option
thereunder is granted (which in no event shall exceed ten
years from the date of grant) and shall provide that the
option shall expire at the end of such period. If the
original term of an option is less than ten years from
the date of grant, the option may be amended prior to its
expiration, with the approval of the Committee and the
Optionee, to extend the term so that the term as amended
is not more than ten years from the date of grant.
However, in the case of an ISO granted to an individual
who, at the time of grant, owns stock possessing more
than 10 percent of the total combined voting power of all
classes of stock of the Company or its Affiliate ("Ten
Percent Stockholder"), such period shall not exceed five
years from the date of grant.
(b) Option Price. The purchase price of each share
of Common stock subject to each option granted pursuant
to the Plan shall be determined by the Committee at the
time the option is granted and, in the case of options
intended to qualify as ISOs or as "performance based
compensation" for purposes of Section 162(m) of the Code,
shall not be less than 100% of the fair market value of a
share of Common Stock on the date the option is granted,
as determined by the Committee. In the case of an ISO
granted to a Ten Percent Stockholder, the option price
shall not be less than 110% of the fair market value of a
share of Common Stock on the date the option is granted.
The purchase price of each share of Common Stock subject
to a Nonqualified Option under this Plan shall be
determined by the Committee prior to granting the option.
The Committee shall set the purchase price for each share
subject to a Nonqualified Option at either the fair
market value of each share on the date the option is
granted, or at such other price as the Committee in its
sole discretion shall determine.
For all purposes under the Plan, the fair market
value of a share of Common Stock on a particular date
shall be determined by such manner as shall be approved
by the Committee. In the event the Common Stock is not
publicly traded at the time a determination of its value
is required to be made hereunder, the determination of
its fair market value shall be made by the Committee in
such manner as it deems appropriate.
(c) Exercise Period. The Committee may provide in
the option agreement that an option may be exercised in
whole, immediately, or is to be exercisable in
increments. However, no portion of any option may be
exercisable by an Optionee prior to the approval of the
Plan by the stockholders of the Company.
(d) Procedure for Exercise. Options shall be
exercised by the delivery of written notice to the
Secretary of the Company setting forth the number of
shares with respect to which the option is being
exercised. Such notice shall be accompanied by payment
of the exercise price for such number of shares, which
may be paid in the form of cash, previously owned shares
of capital stock of the Company, other property deemed
acceptable by the Committee, a reduction in the amount of
Common Stock or other property otherwise issuable
pursuant to such option, or a promissory note of the
Optionee or of a third party, the terms and conditions of
which shall be determined by the Committee. The notice
shall specify the address to which the certificates for
such shares are to be sent. Subject to satisfaction of
any tax obligations pursuant to Section 11, an Optionee
shall be deemed to be a stockholder with respect to
shares covered by an option on the date the Company
receives such written notice and such option payment.
As promptly as practicable after receipt of such written
notification and payment, the Company shall deliver to
the Optionee certificates for the number of shares with
respect to which such option has been so exercised;
provided, however, that such delivery shall be deemed
effected for all purposes when a stock transfer agent of
the Company shall have deposited such certificates in the
United States mail, addressed to the Optionee at the
address specified pursuant to this Section 6(d).
(e) Termination of Employment. In the event an
employee to whom an option is granted ceases to be
employed by the Company for any reason other than death
or disability or if a director to whom an option is
granted ceases to serve on the Board for any reason other
than death or disability, any option previously granted
to him may be exercised (to the extent he would have been
entitled to do so at the date the employee ceases to be
employed by the Company or a director ceases to serve on
the Board) at any time and from time to time, within a
thirty (30) day period after such date the employee
ceases employment with the Company or the director ceases
to serve on the Board; provided, however, the Committee,
in its sole discretion, may (i) allow a longer period for
exercise than thirty (30) days as stated in this
paragraph or (ii) allow for the exercise of all or a part
of those options not exercisable by the employee on
account of his termination of employment or by the
director on account of his cessation from service on the
Board.
(f) Disability or Death of Optionee. In the event
of the determination of disability or the death of an
Optionee under the Plan while he is employed by the
Company or while he serves on the Board, the options
previously granted to him may be exercised (to the extent
he would have been entitled to do so at the date of the
determination of disability or of death) at any time and
from time to time, within a one year period after such
determination of disability or death, by the former
employee or director, the guardian of his estate, the
executor or administrator of his estate or by the person
or persons to whom his rights under the option shall pass
by will or the laws of descent and distribution, but in
no event may the option be exercised after its expiration
under the terms of the option agreement. An Optionee
shall be deemed to be disabled if, in the opinion of a
physician selected by the Committee, he is incapable of
performing services for the Company of the kind he was
performing at the time the disability occurred by reason
of any medically determinable physical or mental
impairment which can be expected to result in death or to
be of long, continued and indefinite duration. The date
of determination of disability for purposes hereof shall
be the date of such determination by such physician. The
Committee, in its sole discretion, may (i) allow a longer
period for exercise than the one year period as stated in
this paragraph or (ii) allow for the exercise of all or a
part of those options not exercisable by the employee on
account of his death or disability.
(g) Incentive Stock Options. Each option agreement
may contain such terms and provisions as the Committee
may determine to be necessary or desirable in order to
qualify an option designated as an ISO.
(h) No Rights as Stockholder. No Optionee shall
have any rights as a stockholder with respect to shares
covered by an option until the option is exercised by the
written notice, accompanied by payment as provided in
clause (d) above, and any tax obligations are satisfied
pursuant to Section 11.
(i) Extraordinary Corporate Transactions. If the
Company recapitalizes or otherwise changes its capital
structure, or merges, consolidates, sells all of its
assets or dissolves (each of the foregoing a "Fundamental
Change"), then thereafter upon any exercise of an option
theretofore granted, the Optionee shall be entitled to
purchase under such option, in lieu of the number of
shares of Common Stock as to which such option shall then
be exercisable, the number and class of shares of stock
and securities to which the Optionee would have been
entitled pursuant to the terms of the Fundamental Change
if, immediately prior to such Fundamental Change, the
Optionee had been the holder of record of the number of
shares of Common Stock as to which such option is then
exercisable. For purposes of the Plan and Options
granted under the Plan, the term "Corporate Change" shall
mean (i) any merger or consolidation in which the Company
shall not be the surviving entity (or survives only as a
subsidiary of another entity whose shareholders did not
own all or substantially all of the Company's Common
Stock immediately prior to such transaction), (ii) the
sale of all or substantially all of the Company's assets
to any other person or entity (other than a wholly-owned
subsidiary), (iii) the acquisition of beneficial
ownership or control of (including, without limitation,
power to vote) more than 50% of the outstanding shares of
Common Stock by any person or entity (including a "group"
as defined by or under Section 13(d)(3) of the Exchange
Act), (iv) the dissolution or liquidation of the Company,
(v) a contested election of directors, as a result of
which or in connection with which the persons who were
directors of the Company before such election or their
nominees cease to constitute a majority of the Board, or
(vi) any other event specified by the Committee,
regardless of whether at the time an Option is granted or
thereafter. The Committee may provide, either at the
time an Option is granted or thereafter, that a Corporate
Change shall have such effect as specified by the
Committee, or no effect, as the Committee in its sole
discretion may provide. Without limiting the foregoing,
the Committee may but need not provide, either at the
time an Option is granted or thereafter, that if a
Corporate Change occurs, then effective as of a date
selected by the Committee, the Committee (which for
purposes of the Corporate Changes described in (iii) and
(v) above shall be the Committee as constituted prior to
the occurrence of such Corporate Change) acting in its
sole discretion without the consent or approval of any
Optionee, will effect one or more of the following
alternatives or combination of alternatives with respect
to all outstanding options (which alternatives may be
conditional on the occurrence of such of the Corporate
Change specified in clause (i) through (v) above which
gives rise to the Corporate Change and which may vary
among individual Optionees): (1) in the case of a
Corporate Change specified in clauses (i), (ii) or (iv),
accelerate the time at which options then outstanding may
be exercised in full for a limited period of time on or
before a specified date (which will permit the Optionee
to participate with the Common Stock received upon
exercise of such option in the event of a Corporate
Change specified in clauses (i), (ii) or (iv), as the
case may be) fixed by the Committee, after which
specified date all unexercised options and all rights of
Optionees thereunder shall terminate, (2) accelerate the
time at which options then outstanding may be exercised
so that such options may be exercised in full for their
then remaining term, or (3) require the mandatory
surrender to the Company of outstanding options held by
such Optionee (irrespective of whether such options are
then exercisable under the provisions of the Plan) as of
a date, before or not later than sixty days after such
Corporate Change, specified by the Committee, and in such
event the Committee shall thereupon cancel such options
and the Company shall pay to each Optionee an amount of
cash equal to the excess of the fair market value of the
aggregate shares subject to such option over the
aggregate option price of such shares; provided, however,
the Committee shall not select an alternative (unless
consented to by the Optionee) that, if the Optionee
exercised his accelerated options pursuant to
alternative 1 or 2 and participated in the transaction
specified in clause (i), (ii) or (iv) or received cash
pursuant to alternative 3, would result in the Optionee's
owing any money by virtue of operation of Section 16(b)
of the Exchange Act. If all such alternatives have such
a result, the Committee shall take such action, which is
hereby authorized, to put such Optionee in as close to
the same position as such Optionee would have been in had
alternative 1, 2 or 3 been selected but without resulting
in any payment by such Optionee pursuant to Section 16(b)
of the Exchange Act. Notwithstanding the foregoing, with
the consent of the Optionee, the Committee may in lieu of
the foregoing make such provision with respect of any
Corporate Change as it deems appropriate.
(j) Acceleration of Options. Except as herein
expressly provided, (i) the issuance by the Company of
shares of stock of any class of securities convertible
into shares of stock of any class, for cash, property,
labor or services, upon direct sale, upon the exercise of
rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company
convertible into such shares or other securities,
(ii) the payment of a dividend in property other than
Common Stock, or (iii) the occurrence of any similar
transaction, and in any case whether or not for fair
value, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number of
shares of Common Stock subject to options theretofore
granted or the purchase price per share, unless the
Committee shall determine in its sole discretion that an
adjustment is necessary to provide equitable treatment to
Optionee. Notwithstanding anything to the contrary
contained in this Plan, the Committee may in its sole
discretion accelerate the time at which any option may be
exercised, including, but not limited to, upon the
occurrence of the events specified in this Section 6, and
is authorized at any time (with the consent of the
Optionee) to purchase options from an Optionee.
(k) Stockholders Agreement. The Committee shall
provide in the option agreement that prior to receiving
any shares of Common Stock or other securities on the
exercise of the option, the Optionee (or the Optionee's
representative upon the Optionee's death) shall be
required to execute the Company's Stockholders Agreement.
SECTION 7. Other Provisions of Options and Other Awards.
(a) Awards. The terms upon which an award under
this Plan (an "Award") is granted shall be evidenced by a
written agreement executed by the Company and the
Participant to whom such Award is granted. Awards that
are granted under this Plan are not restricted to any
specified form or structure and may include, without
limitation, stock options as provided in Sections 5 and
6, sales or bonuses of stock, restricted stock, reload
stock options, stock purchase warrants, other rights to
acquire stock, securities convertible into or redeemable
for stock, stock appreciation rights, limited stock
appreciation rights, phantom stock, dividend equivalents,
performance units or performance shares, or any other
arrangement that involves or might involve the issuance
of Common Stock or a right or interest with a value based
on the value of the Common Stock, and an Award may
consist of one such security or benefit, or consist of or
be amended to include two or more of them in tandem or in
the alternative.
(b) Powers of the Committee. Subject to the
provisions of this Plan, the Committee shall have sole
and absolute discretionary authority (i) to determine,
authorize and designate those Participants who are to
receive Awards under the Plan, (ii) to determine the
number of shares of Common Stock subject to any such
Award, and (iii) at any time to cancel an Award with the
consent of the holder and grant a new Award to such
holder in lieu thereof, which new Award may be for a
greater or lesser number of Shares and may have a higher
or lower exercise or settlement price.
(c) Terms of Awards. Subject to the provisions of
this Plan, the Committee, in its sole and absolute
discretion, shall determine all of the terms and
conditions of each Award granted under this Plan, which
terms and conditions may include, among other things:
(i) provisions permitting the Committee to
allow or require the recipient of such Award, or
permitting any such recipient the right, to pay
the purchase price of the shares or other
property issuable pursuant to such Award, in
whole or in part, by any one or more of the means
permitted for the payment of the exercise price
of options under Section 6(d);
(ii) provisions specifying the purchase,
exercise or settlement price for any Award, or
specifying the method by which such price is
determined, provided that the exercise or
settlement price of any stock appreciation right
or similar Award that is intended to qualify as
"performance based compensation" for purposes of
Section 162(m) of the Code shall be not less than
the fair market value of a share of Common Stock
on the date such Award is granted;
(iii) provisions relating to the
exercisability and/or vesting of Awards, lapse
and non-lapse restrictions upon the shares
obtained or obtainable under Awards or under the
Plan and the termination, expiration and/or
forfeiture of Awards, which provisions may but
need not be conditioned upon the passage of time,
continued employment or service on the Board, the
satisfaction of performance criteria, the
occurrence of certain events (including events
which the Board or the Committee determine
constitute a change of control), or other
factors; and/or
(iv) provisions conditioning or accelerating
the grant of an Award or the receipt of benefits
pursuant to such Award, either automatically or
in the discretion of the Committee, upon the
occurrence of specified events, including,
without limitation, the achievement of
performance goals, the exercise or settlement of
a previous Award, the satisfaction of an event or
condition within the control of the recipient of
the Award or within the control of others, a
change of control of the Company, an acquisition
of a specified percentage of the voting power of
the Company, the dissolution or liquidation of
the Company, a sale of substantially all of the
property and assets of the Company or an event of
the type described in Section 6(i) hereof.
(d) Assignability. Unless otherwise provided by
the Committee, (i) an Award (including an option) shall
not be assignable or otherwise transferable except by
will or by the laws of descent and distribution or
pursuant to a domestic relations order, and (ii) during
the lifetime of a Participant, an Award (including an
option) shall be exercisable only by him.
(e) Changes in Company's Capital Structure. The
existence of outstanding Awards (including any options)
shall not affect in any way the right or power of the
Company or its stockholders to make or authorize any or
all adjustments, recapitalizations, reorganizations,
exchanges, or other changes in the Company's capital
structure or its business, or any merger or consolidation
of the Company, or any issuance of Common Stock or other
securities or subscription rights thereto, or any
issuance of bonds, debentures, preferred or prior
preference stock ahead of or affecting the Common Stock
or the rights thereof, or the dissolution or liquidation
of the Company, or any sale or transfer of all or any
part of its assets or business, or any other corporate
act or proceeding, whether of a similar character or
otherwise. However, if the outstanding shares of Common
Stock or other securities of the Company, or both, for
which the Award is then exercisable or as to which the
Award is to be settled shall at any time be changed or
exchanged by declaration of a stock dividend, stock
split, combination of shares, recapitalization, or
reorganization, the number and kind of shares of Common
Stock or other securities which are subject to the Plan
or subject to any Awards theretofore granted, and the
exercise or settlement prices, shall be appropriately and
equitably adjusted so as to maintain the proportionate
number of shares or other securities without changing the
aggregate exercise or settlement price, provided,
however, that such adjustment shall be made only to the
extent that such will not affect the status of any Award
intended to qualify as an ISO or as "performance based
compensation" under Section 162(m) of the Code.
SECTION 8. Amendments or Termination. The Board may
amend, alter or discontinue the Plan, but no amendment or
alteration shall be made which would impair the rights of any
Award holder, without his consent, under any Award theretofore
granted. Notwithstanding the foregoing, if an amendment to
the Plan would affect the ability of Awards granted under the
Plan to comply with Rule 16b-3 under the Exchange Act or
Section 422 or 162(m) or other applicable provisions of the
Code, the amendment shall be approved by the Company's
stockholders to the extent required to comply with Rule 16b-3
under the Exchange Act, Section 422 or Section 162(m) of the
Code, or other applicable provisions of or rules under the
Code.
SECTION 9. Compliance With Other Laws and Regulations.
The Plan, the grant and exercise of Awards thereunder, and the
obligation of the Company to sell, issue or deliver shares
under such Awards, shall be subject to all applicable federal
and state laws, rules and regulations and to such approvals by
any governmental or regulatory agency as may be required. The
Company shall not be required to issue or deliver any
certificates for shares of Common Stock prior to the
completion of any registration or qualification of such shares
under any federal or state law or issuance of any ruling or
regulation of any government body which the Company shall, in
its sole discretion, determine to be necessary or advisable.
Any adjustments provided for in Section 6(i), Section (6)(j)
and Section 7(e) shall be subject to any shareholder action
required by Delaware corporate law. This Plan is intended to
constitute an unfunded arrangement for a select group of
management or other key employees.
SECTION 10. Purchase for Investment. Unless the Awards
and shares of Common Stock covered by this Plan have been
registered under the Securities Act of 1933, as amended, or
the Company has determined that such registration is
unnecessary, each person exercising an option or other Award
or receiving Common Stock pursuant to any Award under this
Plan may be required by the Company to give a representation
in writing that he is acquiring such shares for his own
account for investment and not with a view to, or for sale in
connection with, the distribution of any part thereof.
SECTION 11. Taxes.
(a) The Company may make such provisions or impose
such conditions as it may deem appropriate for the
withholding or payment by the Participant of any taxes
which it determines are required in connection with any
Awards granted under this Plan.
(b) Notwithstanding the terms of Paragraph 11(a),
any Optionee or other Participant may pay all or any
portion of the taxes required to be withheld by the
Company or paid by him in connection with the exercise of
a Nonqualified Option or the exercise, vesting or
settlement of any other Award by electing to have the
Company withhold shares of Common Stock, or by delivering
previously owned shares of Common Stock, having a fair
market value, determined in accordance with Paragraph
6(b), equal to the amount required to be withheld or
paid. Any such elections are subject to such conditions
or procedures as may be established by the Committee and
may be subject to disapproval by the Committee.
SECTION 12. Replacement of Options. The Committee from
time to time may permit an Optionee under the Plan to
surrender for cancellation any unexercised outstanding option
and receive from the Company in exchange an option for such
number of shares of Common Stock as may be designated by the
Committee. The Committee may, with the consent of the person
entitled to exercise any outstanding option, amend such
option, including reducing the exercise price of any option to
not less than the fair market value of the Common Stock at the
time of the amendment and extending the term thereof.
SECTION 13. No Right to Company Employment. Nothing in
this Plan or as a result of any Award granted pursuant to this
Plan shall confer on any individual any right to continue in
the employ of the Company or interfere in any way with the
right of the Company to terminate an individual's employment
at any time. The Award agreements may contain such provisions
as the Committee may approve with reference to the effect of
approved leaves of absence.
SECTION 14. Liability of Company. The Company and any
Affiliate which is in existence or hereafter comes into
existence shall not be liable to a Participant, an Optionee or
other persons as to:
(a) The Non-Issuance of Shares. The non-issuance
or sale of shares as to which the Company has been unable
to obtain from any regulatory body having jurisdiction
the authority deemed by the Company's counsel to be
necessary to the lawful issuance and sale of any shares
hereunder; and
(b) Tax Consequences. Any tax consequence
expected, but not realized, by any Participant, Optionee
or other person due to the receipt, exercise or
settlement of any option or other Award granted
hereunder.
SECTION 15. Effectiveness and Expiration of Plan. The
Plan shall be effective on the date the Board adopts the Plan.
All Awards, including any options, granted under this Plan are
subject to, and may not be exercised before, the approval of
this Plan by the stockholders prior to the first anniversary
date of the effective date of the Plan, by the affirmative
vote of the holders of a majority of the outstanding shares of
the Company present, or represented by proxy, and entitled to
vote thereat or by written consent in accordance with the laws
of the State of Delaware; provided that if such approval by
the stockholders of the Company is not forthcoming, all
options or other Awards previously granted under this Plan
shall be void. If the stockholders of the Company fail to
approve the Plan within twelve months of the date the Board
approved the Plan, the Plan shall terminate and all options
and other Awards previously granted under the Plan shall
become void and of no effect. No option or other Award
granted under this Plan shall have a term of more than ten
years from the date it is granted. The Plan shall expire ten
years after the effective date of the Plan and thereafter no
Awards shall be granted pursuant to the Plan.
SECTION 16. Non-Exclusivity of the Plan. Neither the
adoption of the Plan by the Board nor the submission of the
Plan to the stockholders of the Company for approval shall be
construed as creating any limitations on the power of the
Board to adopt such other incentive arrangements as it may
deem desirable, including without limitation, the granting of
restricted stock or stock options otherwise than under the
Plan, and such arrangements may be either generally applicable
or applicable only in specific cases.
SECTION l7. Governing Law. This Plan and any agreements
hereunder shall be interpreted and construed in accordance
with the laws of the State of Delaware and applicable federal
law.
WA952790.046/15+